Changes To Business Rates From 1 April 2017
The Government announced in the 2016 Autumn Statement a further package of business rates measures:
Small Business Rate Relief
The Small Business Rate Relief (SBRR) has changed from 50% to 100%. Thresholds are now £12,000 and £15,000 respectively. Therefore, properties with rateable values of £12,000 or below that meet the eligibility criteria will receive 100% relief and those businesses with rateable values between £12,001 and £14,999 will receive tapered relief. The taper will operate as at present – with 100% relief for eligible hereditaments with an RV of £12,000 or below, decreasing to 0% relief for hereditaments with an RV of £15,000 or above.
The threshold for the standard business rates multiplier has increased from a rateable value of £18,000 (£25,500 in London) to £51,000.
For those businesses that take on an additional property which would normally have meant the loss of small business rate relief, the Government has confirmed that they will be allowed to keep that relief for a period of 12 months.
Ratepayers occupying more than one property may continue to get SBRR on the main business assessment, as long as the additional properties have a Rateable Value of less than £2,900 and the aggregate total of the Rateable Values does not exceed £20,000. The disregarded properties do not qualify for SBRR.
To renew your application for SBRR, make a new claim, or to notify us of a change in circumstances, please click on the following link (fields marked with * are mandatory fields):
Rural Rate Relief
The Government have doubled rural rate relief to 100%. The Government has amended the relevant primary legislation to require local authorities to grant 100% mandatory rural rate relief.
Rate Relief on Telecom Fibre Optics
The Government will provide a new 100% business rates relief for new full-fibre infrastructure for a five year period from 1 April 2017 to support the rollout of new full-fibre broadband infrastructure and future 5G communications to homes and businesses.
The necessary changes to primary legislation will be introduced as soon as that is possible and it is anticipated that this will enable the relief to be backdated to April 2017. Therefore, no action is required yet by local authorities until the changes are made. The Department for Communities and Local Government (DCLG) and the Valuation Office Agency will work with the telecoms sector and local government on implementing the relief and will publish guidance on how it will operate in due course.
2017 Revaluation and Transitional Relief
The Government has published the transitional relief scheme for the 2017 revaluation and the associated regulations. It is important to provide the greatest support to small and medium businesses seeing increases and to also allow those small and medium businesses seeing reductions to gain quickly from the revaluation.
The Chancellor announced at the Budget that the Government will introduce a £1,500 business rates discount for office space occupied by local newspapers, up to a maximum of one discount per local newspaper title and per hereditament, and up to state aid limits, for 2 years from 1 April 2017. The relief will be delivered through local authority discretionary discount powers under section 47(3) of the Local Government Finance Act 1988.
Supporting Small Business, Local Discretionary Relief and Pub Relief
On 8 March 2017, in the Spring Budget, the Chancellor of the Exchequer announced that a scheme of relief would be made available to those ratepayers facing large increases as a result of the loss of small business or rural rate relief.
The supporting small businesses relief will ensure that the increase per year in the bills of these ratepayers is limited to the greater of:
•a cash value of £600 per year (£50 per month). This cash minimum increase ensures that those ratepayers currently paying nothing or very small amounts are brought into paying something, or
•the matching cap on increases for small properties in the transitional relief scheme.
Formal guidance on the operation of the scheme including more complex cases and future years has been published by the Department for Communities and Local Government (DCLG).
The Government also announced the establishment of a £300m discretionary fund to all Councils over four years from 2017-18 to support those businesses that face the steepest increases in their business rates bills as a result of the 2017 revaluation.
Erewash Borough Council’s share of this additional funding is £251,000 which will be distributed to local small and medium sized businesses over four years through a new rates relief scheme. The scheme will target the funding at those premises with a rateable value not exceeding £100,000 and work across two bands – those with a value up to £20,000 and those with a value between £20,001 and £100,000. The relief will be awarded to businesses in the lower band to cover the increase in business rates payable as a result of the revaluation between the 2016/17 and 2017/18 financial years, while the funding will be used to ensure the increase payable by businesses in the upper band will be limited to 1.5%. The relief is distributed to the eligible local businesses automatically and efficiently without the need for an application process.
The funding is ‘front-loaded’, meaning £141,000 is available for the current financial year followed by £68,000 in 2018/19, £38,000 in 2019/20 and £4,000 in 2020/2021.
It was also announced that there will be a new relief scheme for pubs that have a rateable value of below £100,000. Under the scheme, eligible pubs will receive a £1,000 discount on their bill. The DCLG has published details of the operation of the relief scheme for pubs and the Council has contacted Ratepayers who may be entitled to receive this reduction. If you consider that you may qualify for pub relief and have not been contacted, please get in touch with us.
State Aid law is the means by which the European Union regulates state funded support to business. If the award of relief is within the threshold of 200,000 euros over a rolling 3 year period and the business is compliant with De Minimis Regulations (EC 1407/2013), Discretionary Business Rate Relief can be granted. A Ratepayer can refuse relief by completing and returning a State Aid Form.
With effect from the financial year 2017/18, billing authorities are no longer required to provide individual copies of explanatory notes when bills are issued. Instead, local authorities will be required to publish explanatory notes online, based on model explanatory notes provided by the DCLG.
Partly Occupied Property Relief
A ratepayer is liable for the full non-domestic rate whether a property is wholly occupied or only partly occupied. Where a property is partly occupied for a short time, the local authority has discretion in certain cases to award relief in respect of the unoccupied part. Full details can be obtained from the local authority.
Small Business Rate Relief
From 2017-18, Small Business Rate Relief (SBRR) has permanently doubled from 50% to 100%. The £6,000 and £12,000 thresholds have increased to £12,000 and £15,000 respectively. Therefore, those with rateable values below £12,000 that meet the eligibility criteria will receive 100% relief and those with rateable values between £12,000 and £15,000 will receive tapered relief.
Previous applicants who failed to meet the criteria due to occupation of ‘multiple’ assessments, have had the lower multiplier automatically applied to their accounts, following a change to the legislation.
Prior to the changes from 1 April 2017, Ratepayers with rateable values below £6,000 paid no rates at all for the period, while ratepayers with rateable values between £6,000 and not more than £12,000 received tapered relief from 100% – 0%.
The legal requirement for an application form to be submitted was removed with effect from 1 April 2012.
This relief is only available to ratepayers who apply to their local authority and who occupy either—
- One property, or
- One main property and other additional properties providing those additional properties each have a rateable value which does not exceed £2,899 (previously £2,599).
WIth effect from 1 April 2017, the rateable value of the one property or the aggregate rateable value of all properties must not exceed £19,999 (previously £17,999 ) outside London or £27,999 (previously £25,499) in London, on every day for which relief is being sought. If the rateable value, or aggregate rateable value, increases above those levels, relief will cease from the day of the increase.
Charity and Community Amateur Sports Club Relief
Charities and Registered Community Amateur Sports Clubs are entitled to 80% relief where the property is occupied by the Charity or CASC and is wholly or mainly used for the charitable purposes of the charity (or of that and other charities), or for the purposes of the CASC (or of that and other CASCs).
The local authority has discretion to give further relief on the remaining bill. Full details can be obtained from the local authority and the application form is available by clicking on the link below.
Non-Profit Making Organisation Relief
The local authority has discretion to give relief to Non-Profit Making Organisations. Full details can be obtained from the local authority. The Application Form is the same as the one above under Charity and Community Amateur Sports Club Relief.
Local Discount and Hardship Relief
The local authority has discretion to give relief in special circumstances. Full details can be obtained from the local authority.
Rate Relief for Businesses in Rural Areas
Certain types of properties in a rural settlement with a population below 3,000 may be entitled to relief. The property must be the only general store, the only post office or a food shop and have a rateable value of less than £8,500, or the only public house or the only petrol station and have a rateable value of less than £12,500. The property has to be occupied.
An eligible ratepayer is entitled to relief at 50% of the full charge whilst the local authority also has discretion to give further relief on the remaining bill. In addition, the local authority can give relief on certain other occupied property in a rural settlement where the rateable value is less than £16,500. Full details can be obtained from the local authority.
Under the terms of the Local Government and Rating Act 1997, Erewash Borough Council is required to compile and maintain a Rural Settlement List for the purpose of administering the Rural Rate Relief Scheme.
|Areas included in the Rural Settlement List 2017/2018|
|Stanley and Stanley Common|
|Stanton By Dale|
The Council is required to review the Rural Settlement List on 31st December each year but it can amend the list at any time to correct any errors or omissions. If you think the list is incorrect please tell us, giving your reasons why you think this is so.
Retail Reoccupation Relief
The government provides relief from business rates for businesses moving into previously empty retail premises. This relief is 50% of the business rate liability on each property reoccupied for a period of 18 months. There is no limit to the rateable value in respect of either the previous or reoccupied property; however, any relief awarded is restricted to the State Aid De Minimis limits.
Properties that will benefit from the relief will be occupied and:
- When previously in use, were wholly or mainly used for retail
- Were unoccupied for 12 months or more immediately before their reoccupation
- Became reoccupied between 1 April 2014 and 31 March 2016
- The reoccupied property’s use is not limited to retail so can be used for any purposes with the exception of hereditaments wholly or mainly being used as betting shops, payday loan shops or pawn brokers.
However we cannot award the relief after 30th September with respect to the previous financial year.